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Comcast + Disney = ?

After yesterday’s announcement that Comcast was bidding $66 billion for media giant Disney, lots of emails started flying, office chatter was up and running, and people most likely started trying to cash in on the executive job deadpools they were part of, as it looks like chief mouse Michael Eisner might not make it through this deal, merger or no merger. But more important than any change in Eisner’s job status is what this would mean for all of us who are in the U.S. and have a television. Or shop at the Disney Store. Or go to Disneyworld/land.

The best comment I’ve heard so far from a good friend of mine was “Does this mean that ABC would, in effect, be a cable network?” I suppose it would. Sort of. So, Comcast could have its hands in, effectively, every market in the nation with an ABC affiliate – without having cable Internet, television or other services in there. Wow. I can’t even begin to fathom the opportunities and changes we would see. Obviously Michael Powell and the FCC would be all over this faster than you can say “MyDoom.A”, but if it were to happen, it would create some interesting times for everyone.

I had planned on taking a few days to collect my thoughts on this issue, but after reading Floyd Norris’ piece in this morning’s New York Times, entitled “Disney Deal Suggests Content Is No Longer King“, I figured I had to say something. I think I disagree with some of the assumptions that Norris makes in his article – I don’t think that content isn’t king – I’m a big purveyor of the opposite. I do agree that “Wall Street values [Disney] a lot less” than it does Comcast, I think a lot of that is the same as what the average person with an interest in Disney thinks – that they’ve diversified so far and wide, and have made some various bad decisions over the past 10-15 years, and these decisions and moves have hurt not only the balance sheet of the company, but the sterling reputation that the company has as a whole. Many people believe that Eisner is arrogant and this was rehashed again when he reportedly refused to meet with Comcast CEO Brian Roberts, leading to Roberts sending him a letter which stated that “it was ‘unfortunate’ that Eisner wasn’t willing to consider a merger.” and that “Given this, the only way for us to proceed is to make a public proposal directly to you and your board,” which led to the public announcement on Tuesday. I guess one might speculate that this isn’t quite as “hostile” a bid as it looks like.

Back on the content trail, I think this shows that Comcast IS looking for content to fill its needs – as it is obviously the distribution channel, and as Disney owns ABC and ESPN properties, which are on the Comcast systems, it fits right in. Roberts truly seems like he wants to “right the ship” at the company, and bringing along former ABC boss Stephen Burke to take on “restoring Disney animation to its rightful place” could be the fix that the shareholders and board is looking for. So content might still king, but being able to successfully distribute it could be the ace in the hole.